Correlation Between Elite Pharma and Amarin PLC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Elite Pharma and Amarin PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elite Pharma and Amarin PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Pharma and Amarin PLC, you can compare the effects of market volatilities on Elite Pharma and Amarin PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elite Pharma with a short position of Amarin PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Pharma and Amarin PLC.

Diversification Opportunities for Elite Pharma and Amarin PLC

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Elite and Amarin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Elite Pharma and Amarin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarin PLC and Elite Pharma is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elite Pharma are associated (or correlated) with Amarin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarin PLC has no effect on the direction of Elite Pharma i.e., Elite Pharma and Amarin PLC go up and down completely randomly.

Pair Corralation between Elite Pharma and Amarin PLC

Given the investment horizon of 90 days Elite Pharma is expected to generate 1.86 times more return on investment than Amarin PLC. However, Elite Pharma is 1.86 times more volatile than Amarin PLC. It trades about 0.13 of its potential returns per unit of risk. Amarin PLC is currently generating about -0.02 per unit of risk. If you would invest  3.00  in Elite Pharma on December 29, 2023 and sell it today you would earn a total of  11.00  from holding Elite Pharma or generate 366.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy75.0%
ValuesDaily Returns

Elite Pharma  vs.  Amarin PLC

 Performance 
       Timeline  
Elite Pharma 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Elite Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Elite Pharma is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Amarin PLC 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Amarin PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Amarin PLC displayed solid returns over the last few months and may actually be approaching a breakup point.

Elite Pharma and Amarin PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elite Pharma and Amarin PLC

The main advantage of trading using opposite Elite Pharma and Amarin PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Pharma position performs unexpectedly, Amarin PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amarin PLC will offset losses from the drop in Amarin PLC's long position.
The idea behind Elite Pharma and Amarin PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.